The recent growing optimism in the London commercial rental market could be dented by the government’s announced spending cuts. With many governmental departments vacating London premises, valuations could theoretically see a dip over the next few quarters.
The recession had a devastating impact on the demand for office space. London saw vacancies hitting historically unknown highs and many plans for new-build or redeveloped office complexes were put on ice.
However, some market experts see opportunities arising from this crisis, at least in the London market. Analysts at JP Morgan think that government-vacated properties will present prime targets for redevelopment. Many also feel that the uniquely strong demand for office space in London will insulate it from the pain which will be felt in other UK cities.
Echoing JP Morgan’s confidence, Aon, Siemens and Rockspring are all either developing or taking up new office space in London.
Image: Flickr (Alex E. Proimos)